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Wednesday, Dec 15, 2004

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Plea to scrap special excise duty on tyres for replacement market

K.R. Srivats

Tyres made for the replacement market currently attract 16 pc basic excise duty plus 8 per cent special excise duty.

New Delhi , Dec. 14

CAPTAINS of domestic tyre industry have made a case before the Revenue Secretary, Mr K.M. Chandrasekhar, for removal of the 8 per cent special excise duty (SED) on tyres manufactured for the replacement market.

Such tyres currently attract 24 per cent excise duty - 16 per cent basic excise duty (BED) plus 8 per cent SED.

At a pre-budget meeting held recently in North Block, members of the Automotive Tyre Manufacturers' Association (ATMA) pitched for reduction in the overall excise duty on all categories of tyres supplied for the replacement market to 16 per cent. Excise duty on tyres supplied to vehicle manufacturers (OEs) is currently 16 per cent. (8 per cent SED is exempted against Form CT2.)

The request for reduction in excise duty on tyres supplied to replacement market has also been made in ATMA's pre-budget memorandum submitted to the Finance Ministry recently.

Commenting on the meeting with the Revenue Secretary, a senior tyre industry official held that there was a perceptible change in the approach of the Finance Ministry in addressing the issues of the industry. "The discussions were on a higher plane and not merely revolved around tariffs or duty rates alone. The Finance Ministry officials were keen to understand issues such as health of the industry, growth prospects, future scope for investments etc. The usual questioning mode seen in such meetings was absent", the official said.

Besides the Chairman of ATMA, Mr Paras K. Chowdhary, the senior management of Apollo Tyres, Goodyear India and MRF also attended the meeting.

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